A UK court on Wednesday reserved its judgement on a plea by a consortium of Indian public sector banks led by State Bank of India(SBI) seeking a bankruptcy order against embattled liquor tycoon Vijay Mallya as part of efforts to recoup around 1.145 billion pounds in unpaid loans.
Judge Michael Briggs reserved his judgment after hearing arguments from both sides in the insolvency division of the High Court on the petition filed by the banks last year, in relation to lending involving Mallya’s now-defunct Kingfisher Airlines.
The verdict in the case is now expected only in the New Year, when the judge could either dismiss the petition and find in favour of the 63-year-old businessman or adjourn the case until the UB Group chief’s latest settlement offer is decided upon by the Indian courts.
Judge Briggs indicated that he may also consider seeking expert evidence on the applicability of Indian law vis-Ã -vis English law in the case.
“And, I thought I was going to understand the case by now,” the judge said, in a light-hearted vein in reference to the complex worldwide litigation process involved in Mallya’s case.
While the banks argued for a bankruptcy order to ensure they receive what is owed to them amid a multiplicity of creditors, Mallya’s lawyers stressed that the Indian banks were identified as secured creditors by the Indian courts, which makes the bankruptcy petition in the UK court unfair.
“Why should we take less than everything we are owed,â€? said Marcia Shekerdemian, the barrister for the Indian banks, in reference to settlement offers.
The court also heard that the banks do not accept the former Kingfisher Airlines boss’ assertion that most of his assets are in India and to a lesser extent worldwide. A villa in France and assets spread across the British Virgin Islands, a trust registered in the Caribbean nation of St. Kitts & Nevis and the Indian Empress superyacht in Malta were some of Mallya’s worldwide assets referred to during the course of Wednesday’s hearing.
“We can’t take Dr Mallya’s assertions at face value,â€? added Shekerdemian.
Mallya’s legal team, led by barrister Philip Marshall, argued for the bankruptcy petition to be dismissed because their client was being unfairly pursued by the banks in India and the UK on opposing grounds.
“Payment has been inhibited by virtue of the intervention by the Enforcement Directorate of India… the banks are seeking a bankruptcy order against Dr Mallya for non-payment but have created a situation where he can’t make a payment,” Marshall told the court.
A previous UK High Court ruling had refused to overturn a worldwide order freezing Mallya’s assets and upheld an Indian court’s ruling that the consortium of 13 Indian banks were entitled to recover funds amounting to nearly 1.145 billion pounds. The banks then launched efforts to recover dues as part of the freezing order, with the bankruptcy petition aimed at seizing UK-based Mallya’s assets to recover the dues.
Meanwhile, Mallya remains on bail pending the UK High Court appeal hearing in the extradition proceedings brought by India in relation to fraud and money laundering charges amounting to Rs 9,000 crores. He had been arrested on an extradition warrant back in April 2017 and has been fighting his extradition in the UK courts since then.
He was granted permission to appeal against his extradition order, which is scheduled in the Royal Courts of Justice in London for February next year.
Source: Economic Times